The S&P/NZSX 50 index dropped 28.8 points or 0.4 per cent to 7,412.74. Within the index, 30 stocks fell, 16 rose and four were unchanged.

Turnover was a light $79.2 million. Trading was thin due to the two-day holiday in China and holidays in Britain and the US overnight, said Nigel Scott, a director at Craigs Investment Partners.

Stock valuations are starting to move toward the top of their ranges after positive earnings reports and people are "just a little bit more conservative" in their approach to the market, with investors taking a "more patient, selective" approach, Mr Scott said.

MSCI index changes - due Wednesday - may also be playing a role in the tepid volumes as investors reposition their portfolios for the new quarter, he said.

A2 Milk, which is traded heavily by Australian investors, led the market lower, shedding 3.2 per cent to $3.32 as investors continued to take some profits. While the stock has come under some pressure in recent sessions, it is still up 61 per cent so far this year.

Among other sectors, dual-listed bank ANZ fell 2.5 per cent to $29.20 while Westpac shed 2.3 per cent to $31.51.

In the other direction, Comvita was the biggest gainer on the day, adding 1.8 per cent to $5.55 as bargain hunters moved in.

The stock has fallen 32 per cent this year on concerns about its access to the Chinese market and, more recently, the potential impact of the myrtle rust fungal disease on its manuka honey supply.

Investore Property - the property investors spun out of Stride Property last year - added 0.7 per cent to $1.36 after it posted an inaugural full-year profit as a listed company that beat its prospectus forecast.

Trade Me benefited after the company announced a tie-up with ASX-listed Afterpay Holdings, an Australian "buy now, pay later" online payments provider, adding 0.6 per cent to $5.32. The partnership will let Trade Me offer interest-free deferred payments to buyers later this year.